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GST Guidelines Updates

CBIC has issued a circular to clarify the issues related to services supplied by restaurants through E-commerce operators in order to simplify the new provision inserted through last GST Council meet.

CBIC vide Notification No. 17/2021- Central tax dated 18-11-2021 inserted the new entry in Section 9(5) of CGST Act and in light of same with effect from 1st January 2022, the “restaurant services” provided through E-commerce operator would be covered under section 9(5) of the CGST Act, 2017 i.e. “Reverse-Charge Mechanism”.

For removal of difficulties to taxpayers of the change in law, CBIC vide Circular No. 167/23/2021-GST dated 17-12-2021 has clarified the matter in respect of supply by way of restaurant services through E-commerce operators (ECO) as following:

  1. The E-commerce operator would be liable to pay the GST on supplies of restaurant service supplied through ECO w.e.f. 01-01-2022. Invoice will be issued by ECO in respect of restaurant services supplied. On any supply that is not notified under section 9(5), that is supplied by a person through ECO, the liability to pay GST continues on such supplier.
  2. ECOs will no longer require to collect TCS and file GSTR-8 in respect of restaurant services on which tax is paid by ECO. However, in case of services other than restaurant services supplied through ECOs which are not notified u/s 9(5), ECOs will continue to pay TCS as per section 52 of CGST Act, 2017.
  3. There is no mandatory requirement for ECOs to take separate registration for payment of tax on restaurant service u/s 9(5) of CGST Act, 2017.
  4. ECOs will also be liable to pay GST on any restaurant service supplied through them by an unregistered supplier restaurant.
  5. ECOs could not be recorded the restaurant services under GSTR 3B as input services (liable to reverse charge) supplied through them. Since they are not the recipient of such service and these are not inward supplies to ECOs.
  6. The liability of payment of tax on restaurant service u/s 9(5) by ECO shall be discharged in cash. No ITC could be utilized for payment of GST on restaurant service supplied through ECO. Further, it is also clarified that ECO shall not be required to reverse ITC on account of restaurant services on which it pays GST.
  7. It is also clarified that the aggregate turnover of persons supplying restaurant service through ECOs shall be computed as defined in section 2(6) of the CGST Act, 2017 and shall include the aggregate value of supplies made by the restaurant through ECOs.
  8. Advise also issue in circular for ECO to raise separate bill on restaurant service in such cases where ECO provides other supplies to a customer under the same order.
  9. ECO may also, for the time being, furnish the details of such supplies of restaurant services under section 9(5) in Table 7A(1) or Table 4A of GSTR-1, as the case may be, for accounting purposes.
  10. Registered persons supplying restaurant services through ECOs under section 9(5) will report such supplies of restaurant services made through ECOs in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B, for the time being.